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Challenges Implementing Multi-Stage E-Commerce Model

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Unit 2: IT 500 Assignment – Challenges implementing multi-stage e-commerce model
Rajesh Salunkhe
May 13th, 2013
Kaplan University (Prof. Sheila Fournier-Bonilla)

Abstract

This paper is written to review some of the challenges associated with all global systems attempting to implement a multi-stage e-commerce model. The paper endeavors to examine these challenges from a cultural, language, time and distance, infrastructure, and currency perspective. Additionally challenges related to state, regional and national law too are examined.

Challenges implementing multi-stage e-commerce model Implementing global systems for a multi-stage ecommerce model can be a daunting challenge and yet provide a growth opportunity simultaneously. Simplistically, e-commerce refers to some form of electronic activity (e.g. buying or selling goods or services online) , that cross organizational barriers, with or without the involvement of WWW or Internet. Ecommerce systems can be implemented as Business-to-Business (B2B), Business-to-Consumer (B2C) , Consumer-to-Consumer (C2C) and Business-to-Government (B2G) models (IBMR, 2008). Regardless of the model, if their associated challenges are well-identified and proactively addressed, then a new world of opportunity due to market expansion and growth potential, awaits the companies, undertaking the risk to implement these e-commerce models. In my opinion, these challenges can be successfully addressed by adopting a four step approach, as below: 1. Identify and analyze the applicable challenge. 2. Devise suitable mitigation strategies or counter-measures to address them. 3. Incorporate an ongoing method of work (MOW) to regularly and objectively monitor, the effectiveness of all the implemented counter-measures. 4. Replace or modify the strategies or counter-measures, with other set of remedial actions, if necessary, until the challenge is satisfactorily mitigated. Let us now examine below, some commonly encountered challenges, while building a global environment of inter-dependent systems, to deliver a multi-stage ecommerce model. Cultural Challenges Culture can be viewed as a set of common characteristics, pertaining to language, social values, religious beliefs, custom folklore, music & arts, cuisine etc. that tend to exert a similar influence on like-minded groups of people, that are bonded together with these common traits and practices (Zimmermann, 2012). Implementing a multi-stage e-commerce model globally will need to inevitably take into consideration the cultural diversity aspects. Countries with different cultural values and social patterns will react differently to any content published on the e-commerce website or portal. It is not just enough to ensure that the published content is acceptable in the local culture, but it also important that enough attention is given to analyze how the content should be presented. Doing so can prove to be very challenging. The designers of the e-commerce model should be cognizant of the local cultural values in that foreign country and ensure that the published e-commerce content doesn’t interposes into any of their local beliefs ,values or gets misunderstood. Localization of the website enables seamless adaptation to the local cultures and thus should be treated as an inevitable business requirement. Localization entails presenting the theme of the content, to facilitate a two-way transfer of information between user and the e-commerce system. Being sensitive to society values is imperative. For example in Middle-East, Asian or Eastern cultures, businesses run by women might find it very challenging to actively engage and develop professional relationship with local male customers. Choice of icons and graphics, color for webpage foreground & background, type of animation used should be carefully planned. For example green color reflects greed in few countries. Designers should be sensitive to these cultural aspects and familiar with the choice of liberal language, acceptable in online content used for advertising or promotion, to avoid any negative perception about their company (“Cultural Issues,” n.d.). Language Challenges Language is a back-bone of any society. Knowing or not knowing the local language can be a game-changing factor for many businesses to sustain and grow. E-commerce models are no exception to this unsaid rule. Thanks to machine translation systems like Google Translate, translating websites written in foreign languages, become accessible to native users. But the drawback is that these machine translation systems don’t translate graphical content. Thus a website using too much graphical content may be vulnerable to getting discarded by some local users unfamiliar with the foreign language. Thus the challenge before designers is to customize their global e-commerce model with every country or region’s national language. This entails not just considering the graphical aspects but also ensuring that the page layout can handle the machine translation to avoid causing display errors. One other disadvantage of using machine translation is that the translated content might convey incorrect meaning for certain words deviating from the original meaning in context of the local country. This needs considerable money and efforts to test the localized version of their websites. (“Cultural Issues,” n.d.). Time and Distance Challenges Time and distance barriers can impede the “speed-to-market” and cross-functional coordination aspects of implementing a global, multi-stage, e-commerce model. For example if the developers are based in Asia and the e-commerce environment is being setup for a client in Argentina then, not having an onsite team in the same time-zone, can considerably slow down the cross-functional, interaction between the developers, QA, business analyst or client business managers. This can lead to budget over-runs or schedule slippage issues. In worst case scenario, the impediments to cross-functional team-work and communication might even result into client expectation not being fully met or partially met (for example e-commerce model being developed as a silo and not properly integrated with core business functions). This could lead to overall project failure or projects getting shelved, as a result of funds running out. Infrastructure Challenges An effective e-commerce model and underlying system needs a set of good infrastructure to enable accomplishing desired performance benchmarks. Infrastructure can be internal to the company (i.e. Servers, routers, switches, firewall, content engine software, e-commerce portal technology, and search/navigation engine etc.) or external to the company (e.g. Internet backbone, Telecommunication and wireless networks or credit/debit card payment processing facilities, secured networks etc.). Not all countries are fortunate enough to have a world-class telecommunication or wireless networks or Internet backbone. Some of the countries even lack enough consumers with credit cards, due to deficiencies in their underlying Electronic Data Interchange (EDI) infrastructure. In these scenarios, due to lack of economies of scale, the telecommunication or Internet access cost can be much higher than its equivalent cost in USA. Potential customers will not spend unlimited money to browse internet and rather just visit the websites they are familiar with. Thus it becomes imperative, to ensure that infrastructure caters to that local audience, and enables loading the webpage quickly and provides the consumer an optimal end-user experience. Thus technical designers will be challenged to optimally size the e-commerce infrastructure, to ensure improved content navigation, user-query and website download performance, ensure maximum concurrent user hits on the web-pages. All these expectations need to be balanced, against the constraints of their local internet capability. Currency Challenges Deploying a good e-commerce model also entails, customizing the systems to accept payments in local currency of that country or region. Doing so will introduce challenges with respect to addressing the local taxation, customs duties, currency exchanges, dollar repatriation hassles (presuming it is an US-based company attempting to open a foreign presence). But the most important aspect is to ensure that the e-commerce transactions occur in the foreign currency. This implies that ecommerce site should provide the means online to the local foreign users, to convert any dollar value listed commodities, into the equivalent local currency value and then allow them to pay in local currency. This implies the shopping cart and the overall e-commerce model to become international-friendly. There will be other ancillary challenges associated with online currency exchange transaction processing too (“Cultural Issues,” n.d.). State, Regional, National Law Challenges It is quite obvious that consumers will have a natural concern and hesitation to do e-commerce business if they don’t get proper assurance that their e-commerce transactions are executed safely. Concerns could be around data or identity-theft, privacy or confidentiality breaches, fraudulent transactions, Phishing etc. Some of the counter-measures, usually adopted, to alleviate these consumer concerns could be data encryptions, Cryptography, digital signatures and certificates, using secured communication protocols between systems (e.g. point-to-point tunneling protocol) etc.. Implementing these counter-measures introduces budgetary, and technical challenges. Additionally, there will be states, regional and national laws enacted by the governments of different countries to ensure e-commerce transactions are secured and fraud-free. Some country have instituted oversight and governance boards or bodies to mandate e-commerce standards. Any global player will have to overcome all these legal challenges and comply with them, to conduct credible e-commerce business (“E-Commerce: Challenges and Issues,” n.d.). Conclusion I personally think that despite all the above discussed challenges, still it is worth the risk, as long as the implementing company has the means to do it. Companies who can overcome these challenges optimally, open themselves to a new world of opportunities, to fuel their business growth and expansion strategies. As they say, “No pain, No Gain”.
References
Zimmermann, K.A. (2012). Definition of Culture. In Live Science. Retrieved from http://www.livescience.com/21478-what-is-culture-definition-of-culture.html
Cultural Issues (n.d.). In International e-Commerce. Retrieved from http://www.jmillerdesigns.com/152-124/international/culture.html
IBMR (2008). E Commerce. Retrieved from http://www.studymode.com/subjects/e-commerce-companies-challenges-page4.html
E-Commerce: Challenges and Issues (n.d.). Retrieved from http://cpe.ku.ac.th/~mcs/docs/E-Commerce_talk.pdf

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